South African pay television company MultiChoice Group swung into a R706m loss before tax in the year to March, it said on Wednesday, hit by currency volatility and weak consumer spending.
FILE PHOTO: A MultiChoice logo is displayed outside the company’s building in Cape Town, South Africa February 2, 2024. REUTERS/Esa Alexander/File Photo
Growing debt woes in many African nations and risk aversion by investors buying African exports have put pressure on foreign currency reserves, creating volatility.
The loss in the year to 31 March compares with a profit before tax of R921m a year before. Shares in the group were down 0.2% at 1448 GMT, against a 1.6% rise in the wider index.
“Volatile and weaker local currencies, power challenges in markets like South Africa, and a weak consumer environment due to rising inflation and high interest rates have created an extremely challenging environment for the group’s customers and operating segments,” MultiChoice said.
Reported group revenue fell 5% to 56 billion rand, but grew 3% when currency swings were stripped out, the owner of Dstv and Showmax video streaming businesses said.
MultiChoice said it will accelerate its cost-saving programme, with a target of R2bn in the new financial year. The company, which operates across 50 countries in sub-Saharan Africa, also plans to cut capital expenditure and prioritise customer retention.
Excluding other items such as interest expenses, the group reported operating profit of R7.1bn last year, down 30% from 2023’s R10.2bn.
Its active subscribers fell 9% to 15.68 million, mainly due to a 13% decline in the Rest of Africa business as mass-market customers in countries like Nigeria had to prioritise basic necessities over entertainment.
The South African business recorded a 5% decline in subscribers, as many would-be customers could not afford to consistently pay for its product or chose not to subscribe due to rolling power cuts last year.
Showmax, which re-launched in February, is showing encouraging early traction, with its paying subscriber base growing 16% from the migrated base at relaunch to year-end, it added.
Source link : https://www.bizcommunity.com/article/multichoice-slides-into-annual-loss-236217a
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Publish date : 2024-06-13 08:01:05
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